Krungsri-BTMU synergy shines 

Bank of Ayudhya (BAY), doing business as Krungsri, and BTMU are both members of Mitsubishi UFJ Financial Group.
Siam City Cement (SCCC) and its subsidiary, Siam City Concrete Co (SCCO), won the bids for 99 per cent of Holcim (Lanka) and 65 per cent of Holcim (Vietnam) from Lafarge Holcim. 
These transactions are seen as major milestones for SCCC in fulfilling its strategic aspiration to become a leading regional player and diversify its businesses from the domestic market. 
Pornsanong Tuchinda, head of commercial banking at Krungsri, said BAY and BTMU teams had put in a collective effort to provide total financial solutions for SCCC, taking on a leading role in advising on, providing and arranging financing to ensure that the company’s expansion plan succeeds. 
Through BAY’s arrangement, the bridge facilities for the Sri Lanka and Vietnam acquisitions were led by BTMU. 
BAY will continue leveraging MUFG’s network in search of opportunities to support Thai |companies’ regional expansion, Pornsanong said. 
Siva Mahasandana, chief executive officer of SCCC, said the Vietnam deal was the largest acquisition ever done by SCCC and also the largest cement acquisition outside Thailand by a Thai corporation. 
“The financing has provided flexibility for SCCC to move forward with confidence in concluding the acquisitions and provided a reasonable time frame for the company to put in place an appropriate take-out plan to repay debt at a later stage and to maintain our strong balance sheet,” he said.
He added that the group had recently completed the acquisitions of cement businesses in Thailand, Bangladesh, Sri Lanka and Vietnam. These investments will start generating cash with immediate effect, as they are in fast-growing markets, especially Sri Lanka and South Vietnam.
Total investment for these acquisitions was about Bt33 billion. In line with SCCC’s policy to maintain a strong balance sheet, the company plans to finance the investments with an equities issue worth Bt17 billion and debentures worth Bt13 billion to maintain a sound capital structure.

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With the acquired assets, Siva said, SCCC’s total cement capacity will increase from 14.8 million tonnes to 26.5 million, and the company will be poised to deliver sustainable business growth with strong revenue-generating capacity from diverse sources beyond Thailand. 
BAY as SCCC’s key relationship bank and BTMU have worked together to provide end-to-end financing solutions to SCCC including the $1.1-billion, one-year financing commitment letter to the seller to support SCCC in bidding for both assets.
They also provided the dual-currency $400-million, one-year bridge loan facility for SCCO’s acquisition of Holcim (Lanka) last August.
BTMU, with support from BAY, acted as a lead arranger for the Bt18.9-billion bridge loan facility for SCCC in its acquisition of Holcim (Vietnam). 
The loan was oversubscribed and syndicated to six local and international banks. 
BAY advised SCCC on capital structure, take-out financing alternatives and discussions with a credit-rating company in relation to its acquisitions and capital structure plan.
BAY is also tapping into opportunities to continue supporting SCCC in refinancing the bridge loans.